Wet spring cuts U.S. corn crop, prices to stay high

ST. LOUIS (AP) — U.S. food prices are expected to stay high through 2012 because a wet spring will likely cut the size of this fall's corn harvest.

The United States will have a surplus of just 695 million bushels of corn in 2012, far less than the 900 million estimated last month.

The Agriculture Department said Thursday that rain delayed planting schedules and will likely diminish crops by harvest time in September. This followed a more optimistic forecast in May, which predicted a drop in corn exports that could have replenished U.S. food supplies and eased prices.

More expensive grain has led to food price increases this year. That could ultimately make everything from beef to cereal to soft drinks more expensive at the supermarket. For all of 2011, the USDA predicts food prices will rise 3 percent to 4 percent.

The United States will have a surplus of 730 million bushels at the end of August, when next year's harvest begins. That's enough to satisfy demand for 20 days. But heavy rains limited the amount of corn that farmers could plant and the government cut its estimate to a surplus, which would last only 18 days. A 30-day supply is the level considered healthy by most investors.

The number of acres planted this year was cut to 90.7 million, from last month's estimate of 92.2 million. And the total area expected to be harvested will drop to 83.2 million acres from last month's estimate of 85.1 million acres.